New Effort to Measure Latino TV Market : Pilot Project to Start Next Month in Southland

JAMES F. PELTZTimes Staff Writer

How many Latinos watch Spanish-language television? In these days of instant ratings, one might think it's an easy question to answer. But to hear the nation's two biggest Spanish-language TV networks and the advertising industry tell it, no one is sure.

And that's a quandary with big financial consequences for the two New York-based networks, Univision Holdings and Telemundo Group. They are unhappy about getting only 1% of the $30 billion spent on TV advertising each year, when Latinos account for nearly 10% of the U.S. population and--according to U.S. Census Bureau estimates--will have disposable income of $172 billion in 1990.

But potential advertisers want better proof of Latino TV viewership before they pump money into the networks' programming, and they claim that the ratings currently available show a muddled picture.

"It's this kind of debate that no one has been able to win," said J. William Grimes, president of Univision, a unit of Hallmark Cards Inc., which owns KMEX-TV Channel 34 in Los Angeles and eight other Spanish-language stations around the country.

Surveys Latino Tastes

So early this month, Univision and Telemundo--a unit of Reliance Group Holdings that owns KVEA-TV Channel 52 in Los Angeles and four other stations--decided to end the debate. They hired A. C. Nielsen, the well-known TV ratings specialist, to develop a new method of measuring which TV shows are watched by Latinos. The goal is to have a Latino ratings service everyone accepts.

Nielsen, in turn, sought help on the $38-million project from Research Resources, a little-known 9-year-old Agoura Hills firm that specializes in measuring Latino consumer tastes.

Research Resources has surveyed Latino reaction to various cars, drinks, foods, movies and home-care products for clients such as Eastman Kodak, Warner-Lambert and Kimberly-Clark, although its research director and vice president, Carlos E. Garcia, declined to identify which products were surveyed for which company.

Garcia said the Nielsen project underlines how the Latino population--which has grown four times faster than the overall population since 1980--can no longer be ignored when it comes to marketing. Previously, a lot of advertisers and their agencies were "not willing to staff for it, they're not willing to budget for it," Garcia said. Now, "they can't say, 'Well, it's not worth it.' "

Biggest Project

Garcia would not divulge how much of the money Research Resources will collect from the Nielsen project. Ceril Shagrin, a senior vice president at Nielsen, said the amount would be less than $1 million.

Garcia also declined to disclose the firm's annual revenue, except to say "it's well into the seven figures" and growing about 10% a year. But he acknowledged that the Nielsen deal "is likely to become our biggest project to date."

The project will start next month with a pilot program in Southern California, chosen because Latinos account for about 30% of the area's population. Research Resources' role will be to set up the pilot program with 200 households that make up a representative sample of Latino TV viewers.

Nielsen, whose well-known TV ratings survey samples 4,000 households nationwide, hopes next year to sample 800 Latino households across the nation to create a new, separate Latino ratings service. But it's undecided whether it will use Research Resources to help with that project as well, Shagrin said.

Why did Nielsen, a unit of Dun & Bradstreet Corp., pick Garcia's firm to help at all? "We started asking people" in the research community, "and the name Research Resources came up," said Edward Schillmoeller, a Nielsen senior vice president for statistical research. "We didn't come across too many other organizations, at least in the Los Angeles area, that specialized in this kind of work and that we felt did a good job."

Special Talents Cited

Research Resources was started in 1980 by Dale Dauten and Theresa Menendez, who had worked for Hollander & Associates, a research firm in Atlanta. By 1988, however, Menendez moved to Miami to start her own firm, and Dauten sold most of Research Resources to his employees for an undisclosed amount. He retains a minority interest and continues as a consultant. The firm is now majority-owned by its eight employees.

Garcia joined the firm last year after spending more than six years at Market Development, a Latino research firm in San Diego. Garcia, 38, who grew up in East Los Angeles, learned several languages and earned a master's degree in comparative literature, then lived in France and taught French and English to French schoolchildren. He thought of becoming a college professor, but said it appeared to be a "career of poverty and intellectual fulfillment." So he took a job in market research.

He said Research Resources' talent lies in its ability to understand and communicate clearly with the Latino community so that its surveys are as accurate as possible.

The firm does both quantitative research, whereby it surveys hundreds or thousands of people with the same questions, and "focus groups," in which it gathers eight to 12 people to discuss a new product or service.

For instance, in trying to survey Latino reaction to a cold breakfast cereal, a focus-group talk likely would reveal that "Hispanics will eat breakfast cereals at night or for afternoon snacks for kids," whereas they prefer hot cereals for breakfast, Garcia said. A quantitative survey might never have picked up that fact, he said.

Advertisers Dispute Figures

In its Nielsen project, Research Resources will try to help settle the dispute over how many Latinos watch television. Ratings, of course, determine how much money the TV networks can charge advertisers for commercial spots. The Spanish networks currently get national Latino ratings numbers from only one source, a Miami-based firm named Strategy Research, Univision's Grimes said. Nielsen and another ratings firm, Arbitron, also measure Latino viewership in certain individual cities, he said.

Grimes said the dispute over Latino rates is this: Strategy Research has estimated that nationally about 70% of Latinos watch Spanish TV. Since Latinos make up about 10% of the population, that means about 7% of the overall population watches the Spanish networks.

But advertisers find those figures too high, compared to the Nielsen and Arbitron ratings for certain cities, he said. In Los Angeles, for instance, Nielsen and Arbitron ratings show about 8% of all the viewers watch Spanish TV--nearly the same as Strategy Research's national ratings. But the Latino population in Los Angeles is three times the national level, Grimes said.

The Spanish networks, meanwhile, have questioned whether the Nielsen and Arbitron figures understate Latino viewership. Grimes said other surveys have shown that, indeed, more than 70% of Latinos watch Spanish TV.

Second Measure Endorsed

The networks "had a good argument because Nielsen and Arbitron weren't really making a big special effort to reach Hispanics," Garcia said.

The result: "There was not an accepted benchmark for dealing with Hispanic audiences, and without that, the Hispanic TV stations felt they were not getting their share of the advertising based on the Hispanic penetration in the United States," Nielsen's Shagrin said.

Strategy Research President Richard W. Tobin agreed that his firm's ratings tend to show more Latino viewers than Nielsen and Arbitron, but said that's because his firm samples a larger number of Latinos. He said he welcomed the new Nielsen project because it would validate his firm's readings.

"We totally endorse the idea of a strong, accurate second measurement," he said.

Such information is becoming more crucial to corporate advertising decisions because advertisers are increasingly anxious to tune in the Latino audience, Garcia said.

"Upper management is finally asking managers, 'Well, what are you doing about the Hispanic market?' " Garcia said. "And the feet aren't dragging anymore. People are realizing there's money to be made, that if they're not in that market, all of their competitors are going to be and they're going to be losing out."